Title V Place of Taxable Transactions - IBFD Volume 2... · Title V Place of Taxable Transactions Chapter 1 Place of supply of goods Section 1 Supply of goods without transport Article

Title VPlace of Taxable Transactions

Chapter 1Place of supply of goods

Section 1Supply of goods without transport

Article 31[Supply of goods without transport]

Where goods are not dispatched or transported, the place of supply shall bedeemed to be the place where the goods are located at the time when the supplytakes place.

Section 2Supply of goods with transport

Article 32[Supply of goods with transport]

Where goods are dispatched or transported by the supplier, or by the customer, orby a third person, the place of supply shall be deemed to be the place where thegoods are located at the time when dispatch or transport of the goods to thecustomer begins.

However, if dispatch or transport of the goods begins in a third territory or thirdcountry, both the place of supply by the importer designated or recognised underArticle 201 as liable for payment of VAT and the place of any subsequent supplyshall be deemed to be within the Member State of importation of the goods.

Article 33[Distance sales]

1. By way of derogation from Article 32, the place of supply of goods dispatched ortransported by or on behalf of the supplier from a Member State other than that inwhich dispatch or transport of the goods ends shall be deemed to be the placewhere the goods are located at the time when dispatch or transport of the goodsto the customer ends, where the following conditions are met:

(a) the supply of goods is carried out for a taxable person, or a non-taxable legalperson, whose intra-Community acquisitions of goods are not subject to VATpursuant to Article 3(1) or for any other non-taxable person;

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Place of Taxable Transactions

(b) the goods supplied are neither new means of transport nor goods suppliedafter assembly or installation, with or without a trial run, by or on behalf of thesupplier.

2. Where the goods supplied are dispatched or transported from a third territory ora third country and imported by the supplier into a Member State other than that inwhich dispatch or transport of the goods to the customer ends, they shall beregarded as having been dispatched or transported from the Member State ofimportation.

Article 34[Distance sales; thresholds]

1. Provided the following conditions are met, Article 33 shall not apply to suppliesof goods all of which are dispatched or transported to the same Member State,where that Member State is the Member State in which dispatch or transport of thegoods ends:

(a) the goods supplied are not products subject to excise duty;

(b) the total value, exclusive of VAT, of such supplies effected under theconditions laid down in Article 33 within that Member State does not in anyone calendar year exceed EUR 100 000 or the equivalent in national currency;

(c) the total value, exclusive of VAT, of the supplies of goods, other than productssubject to excise duty, effected under the conditions laid down in Article 33within that Member State did not in the previous calendar year exceed EUR100 000 or the equivalent in national currency.

2. The Member State within the territory of which the goods are located at the timewhen their dispatch or transport to the customer ends may limit the thresholdreferred to in paragraph 1 to EUR 35000 or the equivalent in national currency,where that Member State fears that the threshold of EUR 100 000 might causeserious distortion of competition.

Member States which exercise the option under the first subparagraph shall takethe measures necessary to inform accordingly the competent public authorities inthe Member State in which dispatch or transport of the goods begins.

3. The Commission shall present to the Council at the earliest opportunity a reporton the operation of the special EUR 35 000 threshold referred to in paragraph 2,accompanied, if necessary, by appropriate proposals.

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4. The Member State within the territory of which the goods are located at the timewhen their dispatch or transport begins shall grant those taxable persons whocarry out supplies of goods eligible under paragraph 1 the right to opt for the placeof supply to be determined in accordance with Article 33.

The Member States concerned shall lay down the detailed rules governing theexercise of the option referred to in the first subparagraph, which shall in any eventcover two calendar years.

Article 14 Regulation [Exceeding the threshold]

Where in the course of a calendar year the threshold applied by a MemberState in accordance with Article 34 of Directive 2006/112/EC is exceeded,Article 33 of that Directive shall not modify the place of supplies of goods otherthan products subject to excise duty carried out in the course of the samecalendar year which are made before the threshold applied by the MemberState for the calendar year then current is exceeded provided that all of thefollowing conditions are met:

(a) the supplier has not exercised the option provided for under Article 34(4)of that Directive;

(b) the value of his supplies of goods did not exceed the threshold in thecourse of the preceding calendar year.

However, Article 33 of Directive 2006/112/EC shall modify the place of thefollowing supplies to the Member State in which the dispatch or transportends:

(a) the supply of goods by which the threshold applied by the Member Statefor the calendar year then current was exceeded in the course of the samecalendar year;

(b) any subsequent supplies of goods within that Member State in thatcalendar year;

(c) supplies of goods within that Member State in the calendar year followingthe calendar year in which the event referred to in point (a) occurred.

Article 35[Distance selling rules not applicable to second-hand goods]

Articles 33 and 34 shall not apply to supplies of second-hand goods, works of art,collectors' items or antiques, as defined in points (1) to (4) of Article 311(1), nor to

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supplies of second-hand means of transport, as defined in Article 327(3), subjectto VAT in accordance with the relevant special arrangements.

Article 36[Installation or assembly]

Where goods dispatched or transported by the supplier, by the customer or by athird person are installed or assembled, with or without a trial run, by or on behalfof the supplier, the place of supply shall be deemed to be the place where thegoods are installed or assembled.

Where the installation or assembly is carried out in a Member State other than thatof the supplier, the Member State within the territory of which the installation orassembly is carried out shall take the measures necessary to ensure that there isno double taxation in that Member State.

Section 3Supply of goods on board ships, aircraft or trains

Article 37[Supply of goods on board ships, aircraft or trains]

1. Where goods are supplied on board ships, aircraft or trains during the section ofa passenger transport operation effected within the Community, the place ofsupply shall be deemed to be at the point of departure of the passenger transportoperation.

2. For the purposes of paragraph 1, “section of a passenger transport operationeffected within the Community” shall mean the section of the operation effected,without a stopover outside the Community, between the point of departure and thepoint of arrival of the passenger transport operation.

“Point of departure of a passenger transport operation” shall mean the firstscheduled point of passenger embarkation within the Community, whereapplicable after a stopover outside the Community.

“Point of arrival of a passenger transport operation” shall mean the last scheduledpoint of disembarkation within the Community of passengers who embarked inthe Community, where applicable before a stopover outside the Community.

In the case of a return trip, the return leg shall be regarded as a separate transportoperation.

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3. The Commission shall, at the earliest opportunity, present to the Council areport, accompanied if necessary by appropriate proposals, on the place oftaxation of the supply of goods for consumption on board and the supply ofservices, including restaurant services, for passengers on board ships, aircraft ortrains.

Pending adoption of the proposals referred to in the first subparagraph, MemberStates may exempt or continue to exempt, with deductibility of the VAT paid at thepreceding stage, the supply of goods for consumption on board in respect ofwhich the place of taxation is determined in accordance with paragraph 1.

Article 15 Regulation [Section of a passenger transport operation]

The section of a passenger transport operation effected within the Communityreferred to in Article 37 of Directive 2006/112/EC, shall be determined by thejourney of the means of transport and not by the journey completed by each ofthe passengers.

Section 4Supplies of gas through a natural gas system, of electricity and of heat or cooling energy through heating and cooling networks10

Article 38[Supplies of gas, electricity, heat or cooling]

1. In the case of the supply of gas through a natural gas system situated within theterritory of the Community or any network connected to such a system, the supplyof electricity, or the supply of heat or cooling energy through heating or coolingnetworks to a taxable dealer, the place of supply shall be deemed to be the placewhere that taxable dealer has established his business or has a fixedestablishment for which the goods are supplied or, in the absence of such a placeof business or fixed establishment, the place where he has his permanent addressor usually resides.

2. For the purposes of paragraph 1, “taxable dealer” shall mean a taxable personwhose principal activity in respect of purchases of gas, electricity, heat or coolingenergy is reselling those products and whose own consumption of those productsis negligible.

10. Replaced by Directive 2009/162/EU.

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Article 39[Supplies of gas, electricity, heat or cooling; place of consumption]

In the case of the supply of gas through a natural gas system situated within theterritory of the Community or any network connected to such a system, the supplyof electricity or the supply of heat or cooling energy through heating or coolingnetworks, where such a supply is not covered by Article 38, the place of supplyshall be deemed to be the place where the customer effectively uses andconsumes the goods. Where all or part of the gas, electricity or heat or coolingenergy is not effectively consumed by the customer, those non-consumed goodsshall be deemed to have been used and consumed at the place where thecustomer has established his business or has a fixed establishment for which thegoods are supplied. In the absence of such a place of business or fixedestablishment, the customer shall be deemed to have used and consumed thegoods at the place where he has his permanent address or usually resides.

Chapter 2Place of an intra-Community acquisition of goods

Article 40[Place of an intra-Community acquisition of goods]

The place of an intra-Community acquisition of goods shall be deemed to be theplace where dispatch or transport of the goods to the person acquiring them ends.

Article 16 Regulation [Place of an intra-Community acquisition; power of taxation]

Where an intra-Community acquisition of goods within the meaning of Article20 of Directive 2006/112/EC has taken place, the Member State in which thedispatch or transport ends shall exercise its power of taxation irrespective ofthe VAT treatment applied to the transaction in the Member State in which thedispatch or transport began. Any request by a supplier of goods for acorrection in the VAT invoiced by him and reported by him to the MemberState where the dispatch or transport of the goods began shall be treated bythat Member State in accordance with its own domestic rules.

Article 41[Place of an intra-Community acquisition; legal presumption]

Without prejudice to Article 40, the place of an intra-Community acquisition ofgoods as referred to in Article 2(1)(b)(i) shall be deemed to be within the territory ofthe Member State which issued the VAT identification number under which theperson acquiring the goods made the acquisition, unless the person acquiring the

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goods establishes that VAT has been applied to that acquisition in accordancewith Article 40.

If VAT is applied to the acquisition in accordance with the first paragraph andsubsequently applied, pursuant to Article 40, to the acquisition in the MemberState in which dispatch or transport of the goods ends, the taxable amount shallbe reduced accordingly in the Member State which issued the VAT identificationnumber under which the person acquiring the goods made the acquisition.

Article 42[Triangulation]

The first paragraph of Article 41 shall not apply and VAT shall be deemed to havebeen applied to the intra-Community acquisition of goods in accordance withArticle 40 where the following conditions are met:

(a) the person acquiring the goods establishes that he has made the intra-Community acquisition for the purposes of a subsequent supply, within theterritory of the Member State identified in accordance with Article 40, forwhich the person to whom the supply is made has been designated inaccordance with Article 197 as liable for payment of VAT;

(b) the person acquiring the goods has satisfied the obligations laid down inArticle 265 relating to submission of the recapitulative statement.

Chapter 3Place of supply of services11

Section 1Definitions

Article 43[Definitions]

For the purpose of applying the rules concerning the place of supply of services:

1. a taxable person who also carries out activities or transactions that are notconsidered to be taxable supplies of goods or services in accordance withArticle 2(1) shall be regarded as a taxable person in respect of all servicesrendered to him;

11. Chapter 3 replaced by Directive 2008/8/EC

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2. a non-taxable legal person who is identified for VAT purposes shall beregarded as a taxable person.

Article 17 Regulation [Status of the customer]

1. If the place of supply of services depends on whether the customer is ataxable or nontaxable person, the status of the customer shall be determinedon the basis of Articles 9 to 13 and Article 43 of Directive 2006/112/EC.

2. A non-taxable legal person who is identified or required to be identified forVAT purposes under point (b) of Article 214(1) of Directive 2006/112/ECbecause his intra-Community acquisitions of goods are subject to VAT orbecause he has exercised the option of making those operations subject toVAT shall be a taxable person within the meaning of Article 43 of that Directive.

Article 18 Regulation [Regarding a customer as a taxable person]

1. Unless he has information to the contrary, the supplier may regard acustomer established within the Community as a taxable person:

(a) where the customer has communicated his individual VAT identificationnumber to him, and the supplier obtains confirmation of the validity of thatidentification number and of the associated name and address inaccordance with Article 31 of Council Regulation (EC) No 904/2010 of 7October 2010 on administrative cooperation and combating fraud in thefield of value added tax;

(b) where the customer has not yet received an individual VAT identificationnumber, but informs the supplier that he has applied for it and the supplierobtains any other proof which demonstrates that the customer is ataxable person or a non-taxable legal person required to be identified forVAT purposes and carries out a reasonable level of verification of theaccuracy of the information provided by the customer, by normalcommercial security measures such as those relating to identity orpayment checks.

2. Unless he has information to the contrary, the supplier may regard acustomer established within the Community as a non-taxable person when hecan demonstrate that the customer has not communicated his individual VATidentification number to him.

3. Unless he has information to the contrary, the supplier may regard acustomer established outside the Community as a taxable person:

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(a) if he obtains from the customer a certificate issued by the customer'scompetent tax authorities as confirmation that the customer is engaged ineconomic activities in order to enable him to obtain a refund of VAT underCouncil Directive 86/560/EEC of 17 November 1986 on theharmonization of the laws of the Member States relating to turnover taxes– Arrangements for the refund of value added tax to taxable persons notestablished in Community territory;

(b) where the customer does not possess that certificate, if the supplier hasthe VAT number, or a similar number attributed to the customer by thecountry of establishment and used to identify businesses or any otherproof which demonstrates that the customer is a taxable person and if thesupplier carries out a reasonable level of verification of the accuracy of theinformation provided by the customer, by normal commercial securitymeasures such as those relating to identity or payment checks.

Section 2General rules

Article 44[Place of supply of services to a taxable person]

The place of supply of services to a taxable person acting as such shall be theplace where that person has established his business. However, if those servicesare provided to a fixed establishment of the taxable person located in a place otherthan the place where he has established his business, the place of supply of thoseservices shall be the place where that fixed establishment is located. In theabsence of such place of establishment or fixed establishment, the place of supplyof services shall be the place where the taxable person who receives such serviceshas his permanent address or usually resides.

Article 19 Regulation [Private use]

For the purpose of applying the rules concerning the place of supply ofservices laid down in Articles 44 and 45 of Directive 2006/112/EC, a taxableperson, or a non-taxable legal person deemed to be a taxable person, whoreceives services exclusively for private use, including use by his staff, shall beregarded as a non-taxable person.

Unless he has information to the contrary, such as information on the nature ofthe services provided, the supplier may consider that the services are for thecustomer's business use if, for that transaction, the customer hascommunicated his individual VAT identification number. Where one and thesame service is intended for both private use, including use by the customer's

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staff, and business use, the supply of that service shall be covered exclusivelyby Article 44 of Directive 2006/112/EC, provided there is no abusive practice.

Article 25 Regulation [Circumstances existing at the time of the chargeable event]

For the application of the rules governing the place of supply of services, onlythe circumstances existing at the time of the chargeable event shall be takeninto account. Any subsequent changes to the use of the service received shallnot affect the determination of the place of supply, provided there is noabusive practice.

Article 10 Regulation [Place of business establishment]

1. For the application of Articles 44 and 45 of Directive 2006/112/EC, theplace where the business of a taxable person is established shall be the placewhere the functions of the business' central administration are carried out.

2.In order to determine the place referred to in paragraph 1, account shall betaken of the place where essential decisions concerning the generalmanagement of the business are taken, the place where the registered officeof the business is located and the place where management meets.

Where these criteria do not allow the place of establishment of a business tobe determined with certainty, the place where essential decisions concerningthe general management of the business are taken shall take precedence.

3. The mere presence of a postal address may not be taken to be the place ofestablishment of a business of a taxable person.

Article 11 Regulation [Fixed establishment]

1. For the application of Article 44 of Directive 2006/112/EC, a “fixedestablishment” shall be any establishment, other than the place ofestablishment of a business referred to in Article 10 of this Regulation,characterised by a sufficient degree of permanence and a suitable structure interms of human and technical resources to enable it to receive and use theservices supplied to it for its own needs.

2. For the application of the following Articles, a “fixed establishment” shall beany establishment, other than the place of establishment of a businessreferred to in Article 10 of this Regulation, characterised by a sufficient degreeof permanence and a suitable structure in terms of human and technicalresources to enable it to provide the services which it supplies:

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(a) Article 45 of Directive 2006/112/EC;

(b) from 1 January 2013, the second subparagraph of Article 56(2) ofDirective 2006/112/EC;

(c) until 31 December 2014, Article 58 of Directive 2006/112/EC;

(d) Article 192a of Directive 2006/112/EC.

3. The fact of having a VAT identification number shall not in itself be sufficientto consider that a taxable person has a fixed establishment.

Article 12 Regulation [Permanent address]

For the application of Directive 2006/112/EC, the “permanent address” of anatural person, whether or not a taxable person, shall be the address enteredin the population or similar register, or the address indicated by that person tothe relevant tax authorities, unless there is evidence that this address does notreflect reality.

Article 13 Regulation [Usual residence]

The place where a natural person “usually resides”, whether or not a taxableperson, as referred to in Directive 2006/112/EC shall be the place where thatnatural person usually lives as a result of personal and occupational ties.

Where the occupational ties are in a country different from that of the personalties, or where no occupational ties exist, the place of usual residence shall bedetermined by personal ties which show close links between the naturalperson and a place where he is living.

Article 20 Regulation [Person established in a single country]

Where a supply of services carried out for a taxable person, or a non-taxablelegal person deemed to be a taxable person, falls within the scope of Article 44of Directive 2006/112/EC, and where that taxable person is established in asingle country, or, in the absence of a place of establishment of a business ora fixed establishment, has his permanent address and usually resides in asingle country, that supply of services shall be taxable in that country.

The supplier shall establish that place based on information from thecustomer, and verify that information by normal commercial security measuressuch as those relating to identity or payment checks.

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The information may include the VAT identification number attributed by theMember State where the customer is established.

Article 21 Regulation [Person established in more than one country]

Where a supply of services to a taxable person, or a non-taxable legal persondeemed to be a taxable person, falls within the scope of Article 44 of Directive2006/112/EC, and the taxable person is established in more than one country,that supply shall be taxable in the country where that taxable person hasestablished his business.

However, where the service is provided to a fixed establishment of the taxableperson located in a place other than that where the customer has establishedhis business, that supply shall be taxable at the place of the fixedestablishment receiving that service and using it for its own needs.

Where the taxable person does not have a place of establishment of abusiness or a fixed establishment, the supply shall be taxable at his permanentaddress or usual residence.

Article 22 Regulation [Fixed establishment to which the service is provided]

1. In order to identify the customer's fixed establishment to which the serviceis provided, the supplier shall examine the nature and use of the serviceprovided.

Where the nature and use of the service provided do not enable him to identifythe fixed establishment to which the service is provided, the supplier, inidentifying that fixed establishment, shall pay particular attention to whetherthe contract, the order form and the VAT identification number attributed bythe Member State of the customer and communicated to him by the customeridentify the fixed establishment as the customer of the service and whether thefixed establishment is the entity paying for the service.

Where the customer's fixed establishment to which the service is providedcannot be determined in accordance with the first and second subparagraphsof this paragraph or where services covered by Article 44 of Directive 2006/112/EC are supplied to a taxable person under a contract covering one ormore services used in an unidentifiable and non-quantifiable manner, thesupplier may legitimately consider that the services have been supplied at theplace where the customer has established his business.

2. The application of this Article shall be without prejudice to the customer'sobligations.

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Article 26 Regulation [Assignment of broadcasting rights; football matches]

A transaction whereby a body assigns television broadcasting rights in respectof football matches to taxable persons, shall be covered by Article 44 ofDirective 2006/112/EC.

Article 27 Regulation [Applying for or receiving refunds of VAT]

The supply of services which consist in applying for or receiving refunds ofVAT under Council Directive 2008/9/EC of 12 February 2008 laying downdetailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund butestablished in another Member State shall be covered by Article 44 ofDirective 2006/112/EC.

Article 28 Regulation [Organising a funeral]

In so far as they constitute a single service, the supply of services made in theframework of organising a funeral shall fall within the scope of Articles 44 and45 of Directive 2006/112/EC.

Article 29 Regulation [Translation of texts]

Without prejudice to Article 41 of this Regulation, the supply of services oftranslation of texts shall fall within the scope of Articles 44 and 45 of Directive2006/112/EC.

Article 45[Place of supply of services to a non-taxable person]

The place of supply of services to a non-taxable person shall be the place wherethe supplier has established his business. However, if those services are providedfrom a fixed establishment of the supplier located in a place other than the placewhere he has established his business, the place of supply of those services shallbe the place where that fixed establishment is located. In the absence of suchplace of establishment or fixed establishment, the place of supply of services shallbe the place where the supplier has his permanent address or usually resides.

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Section 3Particular provisions

Subsection 1Supply of services by intermediaries

Article 46[Supply of services by intermediaries]

The place of supply of services rendered to a non-taxable person by anintermediary acting in the name and on behalf of another person shall be the placewhere the underlying transaction is supplied in accordance with this Directive.

Article 30 Regulation [Services by intermediaries to provider or recipient]

The supply of services of intermediaries as referred to in Article 46 of Directive2006/112/EC shall cover the services of intermediaries acting in the name andon behalf of the recipient of the service procured and the services performedby intermediaries acting in the name and on behalf of the provider of theservices procured.

Article 31 Regulation [Intermediation; accommodation in the hotel sector]

Services supplied by intermediaries acting in the name and on behalf ofanother person consisting of the intermediation in the provision ofaccommodation in the hotel sector or in sectors having a similar function shallfall within the scope of:

(a) Article 44 of Directive 2006/112/EC if supplied to a taxable person actingas such, or a non-taxable legal person deemed to be a taxable person;

(b) Article 46 of that Directive, if supplied to a non-taxable person.

Subsection 2Supply of services connected with immovable property

Article 47[Supply of services connected with immovable property]

The place of supply of services connected with immovable property, including theservices of experts and estate agents, the provision of accommodation in the hotelsector or in sectors with a similar function, such as holiday camps or sitesdeveloped for use as camping sites, the granting of rights to use immovableproperty and services for the preparation and coordination of construction work,

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such as the services of architects and of firms providing on-site supervision, shallbe the place where the immovable property is located.

Subsection 3Supply of transport

Article 48[Supply of passenger transport]

The place of supply of passenger transport shall be the place where the transporttakes place, proportionate to the distances covered.

Article 49[Supply of the transport of goods]

The place of supply of the transport of goods, other than the intra-Communitytransport of goods, to non-taxable persons shall be the place where the transporttakes place, proportionate to the distances covered.

Article 50[Supply of the intra-Community transport of goods]

The place of supply of the intra-Community transport of goods to non-taxablepersons shall be the place of departure.

Article 51[Supply of the intra-Community transport of goods; definitions]

"Intra-Community transport of goods” shall mean any transport of goods inrespect of which the place of departure and the place of arrival are situated withinthe territories of two different Member States.

“Place of departure” shall mean the place where transport of the goods actuallybegins, irrespective of distances covered in order to reach the place where thegoods are located and “place of arrival” shall mean the place where transport ofthe goods actually ends.

Article 52[Supply of the intra-Community transport of goods; partial exclusion]

Member States need not apply VAT to that part of the intra-Community transportof goods to non-taxable persons taking place over waters which do not form partof the territory of the Community.

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Subsection 4Supply of cultural, artistic, sporting, scientific, educational, entertainment and similar services, ancillary transport services and valuations of and work on movable property

Article 53[Place of supply of services in respect of admission]

The place of supply of services in respect of admission to cultural, artistic,sporting, scientific, educational, entertainment or similar events, such as fairs andexhibitions, and of ancillary services related to the admission, supplied to ataxable person, shall be the place where those events actually take place.12

Article 32 Regulation [Services in respect of admission; scope]

1. Services in respect of admission to cultural, artistic, sporting, scientific,educational, entertainment or similar events as referred to in Article 53 ofDirective 2006/112/EC shall include the supply of services of which theessential characteristics are the granting of the right of admission to an eventin exchange for a ticket or payment, including payment in the form of asubscription, a season ticket or a periodic fee.

2. Paragraph 1 shall apply in particular to:

(a) the right of admission to shows, theatrical performances, circusperformances, fairs, amusement parks, concerts, exhibitions, and othersimilar cultural events;

(b) the right of admission to sporting events such as matches orcompetitions;

(c) the right of admission to educational and scientific events such asconferences and seminars.

3. Paragraph 1 shall not cover the use of facilities such as gymnastics hallsand suchlike, in exchange for the payment of a fee.

Article 33 Regulation [Services which are directly related to admission]

The ancillary services referred to in Article 53 of Directive 2006/112/EC shallinclude services which are directly related to admission to cultural, artistic,

12. Based on Directive 2008/8/EC, replaced from 1 January 2011.

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sporting, scientific, educational, entertainment or similar events and which aresupplied separately for a consideration to a person attending an event.

Such ancillary services shall include in particular the use of cloakrooms orsanitary facilities but shall not include mere intermediary services relating tothe sale of tickets.

Article 54[Place of supply of cultural etc. services]

1. The place of supply of services and ancillary services, relating to cultural,artistic, sporting, scientific, educational, entertainment or similar activities, suchas fairs and exhibitions, including the supply of services of the organisers of suchactivities, supplied to a non-taxable person shall be the place where thoseactivities actually take place.

2. The place of supply of the following services to a non-taxable person shall bethe place where the services are physically carried out:

(a) ancillary transport activities such as loading, unloading, handling and similaractivities;

(b) valuations of and work on movable tangible property.13

Article 34 Regulation [Assembly of parts all provided by customer]

Except where the goods being assembled become part of immovableproperty, the place of the supply of services to a non-taxable personconsisting only of the assembly by a taxable person of the various parts of amachine, all of which were provided to him by his customer, shall beestablished in accordance with Article 54 of Directive 2006/112/EC.

Subsection 5Supply of restaurant and catering services

Article 55[Supply of restaurant and catering services]

The place of supply of restaurant and catering services other than those physicallycarried out on board ships, aircraft or trains during the section of a passenger

13. Based on Directive 2008/8/EC, replaced from 1 January 2011.

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transport operation effected within the Community, shall be the place where theservices are physically carried out.

Subsection 6Hiring of means of transport

Article 56[Hiring of means of transport]

1. The place of short-term hiring of a means of transport shall be the place wherethe means of transport is actually put at the disposal of the customer.

2. The place of hiring, other than short-term hiring, of a means of transport to anon-taxable person shall be the place where the customer is established, has hispermanent address or usually resides.

However, the place of hiring a pleasure boat to a non-taxable person, other thanshort-term hiring, shall be the place where the pleasure boat is actually put at thedisposal of the customer, where this service is actually provided by the supplierfrom his place of business or a fixed establishment situated in that place.

3. For the purposes of paragraphs 1 and 2, “short-term” shall mean the continuouspossession or use of the means of transport throughout a period of not more thanthirty days and, in the case of vessels, not more than ninety days.

Article 38 Regulation [Means of transport; scope]

1. “Means of transport” as referred to in Article 56 and point (g) of the firstparagraph of Article 59 of Directive 2006/112/EC shall include vehicles,whether motorised or not, and other equipment and devices designed totransport persons or objects from one place to another, which might be pulled,drawn or pushed by vehicles and which are normally designed to be used andactually capable of being used for transport.

2. The means of transport referred to in paragraph 1 shall include, in particular,the following vehicles:

(a) land vehicles, such as cars, motor cycles, bicycles, tricycles andcaravans;

(b) trailers and semi-trailers;

(c) railway wagons;

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(d) vessels;

(e) aircraft;

(f) vehicles specifically designed for the transport of sick or injured persons;

(g) agricultural tractors and other agricultural vehicles;

(h) mechanically or electronically propelled invalid carriages.

3. Vehicles which are permanently immobilised and containers shall not beconsidered to be means of transport as referred to in paragraph 1.

Article 23 Regulation [The place of establishment; factual information]

1. From 1 January 2013, where, in accordance with the first subparagraph ofArticle 56(2) of Directive 2006/112/EC, a supply of services is taxable at theplace where the customer is established, or, in the absence of anestablishment, where he has his permanent address or usually resides, thesupplier shall establish that place based on factual information provided by thecustomer, and verify that information by normal commercial security measuressuch as those relating to identity or payment checks.

Article 24 Regulation [Priority to the place of actual consumption]

1. From 1 January 2013, where services covered by the first subparagraph ofArticle 56(2) of Directive 2006/112/EC, are supplied to a non-taxable personwho is established in more than one country or has his permanent address inone country and his usual residence in another, priority shall be given to theplace that best ensures taxation at the place of actual consumption whendetermining the place of supply of those services.

Article 39 Regulation [Duration of the continuous possession]

1. For the application of Article 56 of Directive 2006/112/EC, the duration ofthe continuous possession or use of a means of transport which is the subjectof hiring shall be determined on the basis of the contract between the partiesinvolved.

The contract shall serve as a presumption which may be rebutted by anymeans in fact or law in order to establish the actual duration of the continuouspossession or use. The fact that the contractual period of short-term hiringwithin the meaning of Article 56 of Directive 2006/112/EC is exceeded on

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grounds of force majeure shall have no bearing on the determination of theduration of the continuous possession or use of the means of transport.

2. Where hiring of one and the same means of transport is covered byconsecutive contracts between the same parties, the duration shall be that ofthe continuous possession or use of the means of transport provided for underthe contracts as a whole.

For the purposes of the first subparagraph a contract and its extensions shallbe consecutive contracts.

However, the duration of the short-term hire contract or contracts preceding acontract which is regarded as long-term shall not be called into questionprovided there is no abusive practice.

3. Unless there is abusive practice, consecutive contracts between the sameparties for different means of transport shall not be considered to beconsecutive contracts for the purposes of paragraph 2.

Article 40 40 Regulation [Actually put at the disposal]

The place where the means of transport is actually put at the disposal of thecustomer as referred to in Article 56(1) of Directive 2006/112/EC, shall be theplace where the customer or a third party acting on his behalf takes physicalpossession of it.

Subsection 7Supply of restaurant and catering services for consumption on board ships, aircraft or trains

Article 57[Restaurant and catering services on board ships, aircraft or trains]

1. The place of supply of restaurant and catering services which are physicallycarried out on board ships, aircraft or trains during the section of a passengertransport operation effected within the Community, shall be at the point ofdeparture of the passenger transport operation.

2. For the purposes of paragraph 1, “section of a passenger transport operationeffected within the Community” shall mean the section of the operation effected,without a stopover outside the Community, between the point of departure and thepoint of arrival of the passenger transport operation.

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“Point of departure of a passenger transport operation” shall mean the firstscheduled point of passenger embarkation within the Community, whereapplicable after a stopover outside the Community.

“Point of arrival of a passenger transport operation” shall mean the last scheduledpoint of disembarkation within the Community of passengers who embarked inthe Community, where applicable before a stopover outside the Community.

In the case of a return trip, the return leg shall be regarded as a separate transportoperation.

Article 35 Regulation [Section of a passenger transport within the Community]

The section of a passenger transport operation effected within the Communityas referred to in Article 57 of Directive 2006/112/EC shall be determined bythe journey of the means of transport and not by the journey completed byeach of the passengers.

Article 36 Regulation [Restaurant services partly within the Community; place]

Where restaurant services and catering services are supplied during thesection of a passenger transport operation effected within the Community,that supply shall be covered by Article 57 of Directive 2006/112/EC.

Where restaurant services and catering services are supplied outside such asection but on the territory of a Member State or a third country or thirdterritory, that supply shall be covered by Article 55 of that Directive.

Article 37 Regulation [Restaurant services partly within the Community; determination]

The place of supply of a restaurant service or catering service carried outwithin the Community partly during a section of a passenger transportoperation effected within the Community, and partly outside such a sectionbut on the territory of a Member State, shall be determined in its entiretyaccording to the rules for determining the place of supply applicable at thebeginning of the supply of the restaurant or catering service.

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Subsection 8Supply of electronic services to non-taxable persons

Article 58[Electronic services to non-taxable persons]

The place of supply of electronically supplied services, in particular those referredto in Annex II, when supplied to non-taxable persons who are established in aMember State, or who have their permanent address or usually reside in a MemberState, by a taxable person who has established his business outside theCommunity or has a fixed establishment there from which the service is supplied,or who, in the absence of such a place of business or fixed establishment, has hispermanent address or usually resides outside the Community, shall be the placewhere the non-taxable person is established, or where he has his permanentaddress or usually resides.

Where the supplier of a service and the customer communicate via electronic mail,that shall not of itself mean that the service supplied is an electronically suppliedservice.14

Article 23 Regulation [Place of establishment; factual information]

2. Where, in accordance with Articles 58 and 59 of Directive 2006/112/EC, asupply of services is taxable at the place where the customer is established, or,in the absence of an establishment, where he has his permanent address orusually resides, the supplier shall establish that place based on factualinformation provided by the customer, and verify that information by normalcommercial security measures such as those relating to identity or paymentchecks.

14. Based on Directive 2008/8/EC, from 1 January 2015, Subsection 8 shall be replaced by the fol-lowing:“Subsection 8Supply of telecommunications, broadcasting and electronic services to non-taxable personsArticle 58The place of supply of the following services to a non-taxable person shall be the place wherethat person is established, has his permanent address or usually resides:(a) telecommunications services;(b) radio and television broadcasting services;(c) electronically supplied services, in particular those referred to in Annex II.Where the supplier of a service and the customer communicate via electronic mail, that shall notof itself mean that the service supplied is an electronically supplied service."

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Article 24 Regulation [Priority to actual consumption]

2. Where services covered by Articles 58 and 59 of Directive 2006/112/EC aresupplied to a non-taxable person who is established in more than one countryor has his permanent address in one country and his usual residence inanother, priority shall be given to the place that best ensures taxation at theplace of actual consumption when determining the place of supply of thoseservices.

Subsection 9Supply of services to non-taxable persons outside the Community

Article 59[Services to non-taxable persons outside the Community]

The place of supply of the following services to a non-taxable person who isestablished or has his permanent address or usually resides outside theCommunity, shall be the place where that person is established, has hispermanent address or usually resides:

(a) transfers and assignments of copyrights, patents, licences, trademarks andsimilar rights;

(b) advertising services;

(c) the services of consultants, engineers, consultancy firms, lawyers,accountants and other similar services, as well as data processing and theprovision of information;

(d) obligations to refrain from pursuing or exercising, in whole or in part, abusiness activity or a right referred to in this Article;

(e) banking, financial and insurance transactions including reinsurance, with theexception of the hire of safes;

(f) the supply of staff;

(g) the hiring out of movable tangible property, with the exception of all means oftransport;

(h) the provision of access to a natural gas system situated within the territory ofthe Community or to any network connected to such a system, to theelectricity system or to heating or cooling networks, or the transmission or

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distribution through these systems or networks, and the provision of otherservices directly linked thereto;15

(i) telecommunications services;

(j) radio and television broadcasting services;

(k) electronically supplied services, in particular those referred to in Annex II.

Where the supplier of a service and the customer communicate via electronic mail,that shall not of itself mean that the service supplied is an electronically suppliedservice.16

Article 41 Regulation [Translation of texts]

The supply of services of translation of texts to a non-taxable personestablished outside the Community shall be covered by point (c) of the firstparagraph of Article 59 of Directive 2006/112/EC.

Subsection 10Prevention of double taxation or non-taxation

Article 59a[Effective use and enjoyment]

In order to prevent double taxation, non-taxation or distortion of competition,Member States may, with regard to services the place of supply of which isgoverned by Articles 44, 45, 56 and 59:

(a) consider the place of supply of any or all of those services, if situated withintheir territory, as being situated outside the Community if the effective use andenjoyment of the services takes place outside the Community;

(b) consider the place of supply of any or all of those services, if situated outsidethe Community, as being situated within their territory if the effective use andenjoyment of the services takes place within their territory.

15. Replaced by Directive 2009/162/EU.16. Based on Directive 2008/8/EC, from 1 January 2015, in Article 59, points (i), (j) and (k) of the first

paragraph and the second paragraph shall be deleted.

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However, this provision shall not apply to the electronically supplied serviceswhere those services are rendered to non-taxable persons not established withinthe Community.17

Article 59b[Effective use and enjoyment; telecommunications, radio and television broadcasting services]

Member States shall apply Article 59a(b) to telecommunications services andradio and television broadcasting services, as referred to in point (j) of the firstparagraph of Article 59, supplied to non-taxable persons who are established in aMember State, or who have their permanent address or usually reside in a MemberState, by a taxable person who has established his business outside theCommunity or has a fixed establishment there from which the services aresupplied, or who, in the absence of such a place of business or fixedestablishment, has his permanent address or usually resides outside theCommunity.18

Chapter 4Place of importation of goods

Article 60[Place of importation]

The place of importation of goods shall be the Member State within whose territorythe goods are located when they enter the Community.

17. Based on Directive 2008/8/EC, from 1 January 2015, Article 59a shall be replaced by the follow-ing:"Article 59aIn order to prevent double taxation, non-taxation or distortion of competition, Member Statesmay, with regard to services the place of supply of which is governed by Articles 44-45, 56 and58-59:(a) consider the place of supply of any or all of those services, if situated within their territory, as

being situated outside the Community if the effective use and enjoyment of the servicestakes place outside the Community;

(b) consider the place of supply of any or all of those services, if situated outside the Commu-nity, as being situated within their territory if the effective use and enjoyment of the servicestakes place within their territory.”

18. Based on Directive 2008/8/EC, from 1 January 2015, Article 59b shall be deleted.

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Article 61[Place of importation, goods under special arrangements]

By way of derogation from Article 60, where, on entry into the Community, goodswhich are not in free circulation are placed under one of the arrangements orsituations referred to in Article 156, or under temporary importation arrangementswith total exemption from import duty, or under external transit arrangements, theplace of importation of such goods shall be the Member State within whoseterritory the goods cease to be covered by those arrangements or situations.

Similarly, where, on entry into the Community, goods which are in free circulationare placed under one of the arrangements or situations referred to in Articles 276and 277, the place of importation shall be the Member State within whose territorythe goods cease to be covered by those arrangements or situations.

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Documents

Title V Place of Taxable Transactions - IBFD Volume 2... · Title V Place of Taxable Transactions Chapter 1 Place of supply of goods Section 1 Supply of goods without transport Article